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Canadian dollar extends gains as BoC limits further upside for USD/CAD
USD/CAD was around 1.4010, with the US retail sales and jobs data failing to lift the greenback after expectations grew the Fed is moving toward monetary easing.
The Canadian dollar extended its advance versus the US dollar, pushing USD/CAD to trade around 1.4010 on Thursday. The pair was down 0.2% on the day as CAD gains persisted despite a streak of US economic releases broadly in line with expectations.
FXStreet said US retail sales rose 0.2% month over month in June, while the retail sales control group increased 0.5%, both matching forecasts. Initial jobless claims fell to 208K from a revised 216K, reinforcing labor-market resilience, but the greenback still struggled to sustain a rebound.
The report linked the limited USD reaction to recent inflation signals that have reinforced expectations the Federal Reserve will move toward monetary easing. It also cited earlier, softer-than-expected US producer price data as keeping upward pressure on the dollar in check.
On the Canadian side, the Bank of Canada held its benchmark rate unchanged at 2.25% on Wednesday for a sixth straight meeting, and BoC Governor Tiff Macklem said growth appears to be resuming after stalling, while US trade policy remains a headwind. FXStreet added that geopolitical risk from strikes involving Iranian targets and related fallout could support safe havens, but easing oil prices have capped additional support for the commodity-linked Canadian dollar.